I love Dragons’ Den. There, I said it. I know some business folk are a dismissive of the show because it can glamourise the investment process and potentially mislead around the rigor involved in securing funding – but I just love it! You can also accuse the show of sensationalising some of the issues which could literally make or break a young business but we’re all adults here so surely we know what we’re letting ourselves in for?
There are many reasons to love The Den and if it is used correctly it can be the perfect platform to propel a small business to the next level which is a fantastic gift to the small business world. However, I love it for one reason: the business lessons. It’s a marvellous microcosm for the business world and emphasises some of the amazing abilities and frustrating failings of the entrepreneurial world.
I have watched the show all the way through but this series I decided not to be a passive observer and get stuck in to offer my thoughts on any foodie that makes their way passed Evan’s lair in the basement and through those ominous sliding elevator doors. So this series I’m going to pull out some of the business lessons gleaned from any brave foodie to enter The Den. I’d also like to point out that what follows is not a criticism but a critique; even if it goes badly wrong, anyone that demonstrates the stones to go on TV to bare all has my respect!
Season 15: episode 5
Entrepreneur(s): Adelle Smith
Elevator Pitch: children’s baking brand with an ethos of fuelling children’s imagination
Asking For: £80k in exchange for 20% equity
What Went Well?
The Product: it’s on trend. Baking and crafting has grown exponentially over the last few years and any activity that brings the family together is bound to resonate with a large audience.
Branding: the products all look fantastic, polished and very clean. It’s easy to see how the range would stand it out in major retailers. It looks premium and fits the premium price point and will certainly offer a point of disruption on shelf versus the beige competition currently on offer in supermarkets.
What Could Have Gone Better?
Subscription Sales: subscription offerings are another rapidly expanding market and brands like Graze have demonstrated that it’s a fantastically effective way to build a brand. However, this entrepreneur failed to capitalise on a potential USP that could support the brand in commanding a premium price point.
‘Strong’ Interest: unfortunately this is a trap that a lot of entrants to The Den fall into. Entrepreneurs are very keen to tell the Dragons which retailers have shown some interest in placing orders; but this isn’t something you can put in the bank. It’s a great encouragement but it’s worthless until the invoice is paid.
What Other Lessons Can We Learn?
Negotiation is a Game: I appreciate that emotions must run high in The Den but Adele’s poker face slipped when Peter Jones made his offer and weakened her negotiation position with both Dragons. I admit that I’d probably get a bit giddy and it must be really difficult not to react on the spot but it’s not a strong stance unless it’s a professional flinch!
Outcome: Success! 35% given to the serial foodie backer Peter Jones!
Would Munkee invest? I wouldn’t usually want to disagree with Peter Jones but did I mention I’m risk averse? The market for baking kits is evolving with the continued success of GBBO but I’m not convinced that the high volume retailers would back a premium offering in a big way. I’m sure this brand will have a lot of success in premium outlets but I’m not sure we’re going to be overcome by a sea of black and white, so I’m out – however I’d love to be wrong!